Euro zone inflation slows by more than expected in May

Inflation measure excludes volatile energy and unprocessed food prices also fell to 1% from 1.2%

Euro zone consumer price rises slowed year-on-year in May from April, an estimate by the European Union's statistics office showed on Wednesday, mainly because of lower increases of energy and food costs.

Eurostat said inflation in the 19 countries sharing the euro slowed to 1.4 per cent year-on-year from 1.9 per cent in April, slightly below market expectations of a 1.5 per cent reading.

The inflation measure which excludes the volatile energy and unprocessed food prices also fell to 1 per cent from 1.2 per cent, in line with economists expectations.

Energy prices increased by 4.6 per cent year-on-year in May, Eurostat estimated, from a 7.6 per cent rise in April. Unprocessed food costs were 1.6 per cent higher than a year earlier, against 2.2 per cent in April.

The European Central Bank wants to keep inflation below, but close to 2 per cent over the medium term and has been buying 60 billion euros worth of bonds per month to inject more cash into the economy and drive price growth closer to its target.

Eurostat also reported that the unemployment rate in the euro zone fell to an eight-year low of 9.3 per cent.